The Fix

Joe Doakes from Como Park emails:

Trump has only been President four weeks and already, inflation is out of control.  Higher than it’s been during the entire last term of President Obama’s administration. 

That . . . or the Obama administration faked the numbers and only now are the true numbers coming out.  Nobody wants bad economic news; but I’d rather have real bad news than fake good news.  But that’s not the real meaning of this story, here’s the deeper meaning:

The Federal Reserve during most of 2016 refrained from raising rates too quickly for fear of interrupting a fragile recovery but has taken a different view of the likely course of monetary policy in 2017, citing “uncertainty” as any expansionary fiscal policies from President Donald Trump have yet to take shape.

In other words, the Deep State and Quasi-Government wonks are Liberals who held down rates when they thought it would benefit Democrats in the election, but now intend to torpedo Trump any way they can.  One of the easiest is to “discover” rampant inflation so they can jack up interest rates to fight the rampant inflation they’ve suddenly discovered. 

Higher interest rates will panic consumers, kill housing, stifle growth, and mushroom debt service on The Light Bringer’s 20-Trillion Debt.  Shifting dollars to debt service will kill the possibility of a realistic budget and doom The Wall.

Liberals and Never-Trumpers will then proclaim it’s all Trump’s fault, except for the parts that are Bush’s fault.

Joe Doakes

There’s a reason the Establishmet is, well, established.

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32 thoughts on “The Fix

  1. Janet Yellen is up for removal next year. She has nothing to lose personally, and as a reprobate leftist, she sees wrecking the US economy as a consequence of hurting Trump as a feature, not a flaw.

  2. I’ve always hated the “Obama inherited a mess” line. Obama wanted to be prez. He went after it like a heat seeking missing. If Obama inherited a mess, what sis Trump inherit? The world is o fire, God’s sake. Russkis in Crimea and Ukraine, Ibya a failed state, Syrian civil war, Iraq near a failed state, ISIS attacking R&L in Europe and the US, Iran building nukes, billion dollar deficits, country more racially divided since the 60s.
    This is the mess Obama left for Trump. This is what he said he could deal with.

  3. EI, certainly Obama did not create any messes, which explains the collapse of the ACA exchanges, Syria, Turkey, the Taliban and Al Qaida running Afghanistan and Pakistan, Libya, the weakest recovery in about a century, and close to ten trillion dollars of on the books national debt.

    Honestly…..

    And if Treasury officials really believe they can pin inflation on Trump this early, they need to be fired….anyone who understands budgeting and how the federal government works knows that the January numbers are attributable to the guy who was President for 2/3 of that month.

  4. Inflation would be entertaining because the Krugster has made a career out of saying that there is nothing wrong with inflation. It’s his trademark. It’s so out of line with orthodox economics that it probably cost Krugman a seat on Obama’s Council of Economic Advisers.
    So it would be neat to him turn 180 on the topic because it was “Trumpflation.”

  5. PM wrote: “DJIA at yesterday’s close: 20,619.77. I hope we get many more such messes.”

    Trump during the campaign said the stock
    market was: “in a big, fat, ugly bubble”. Now as president Trump claims credit for it. Which is it? Bubble or not?

  6. eTASS, please address the take down of your 6:08am post. Your doubling down on stupid is not playing very well – for you.

  7. Just when I thought dumb had reached it’s nadir, a new bottom is breached.

    Trump has inherited a country with the lowest unemployment rate in 20 yrs combined with the longest economic expansion in US history. And as MP noted, the second longest bull market in US history.

    “How do we know this actually happened? I am getting a briefing in March and at that point we will have a better idea.” Trump is waiting to hear from Putin as to whether this actually happened.

    Trump will now be accountable to the American people. Whether he likes it or not he will have nobody else to blame, although I am sure he will.

    .

  8. Trump has inherited a country with the lowest unemployment rate in 20 yrs combined with the longest economic expansion in US history. And as MP noted, the second longest bull market in US history.

    And the highest underemployment and deficit level – EVER. Stupidity nadir is all yours, eTASS. Keep digging..

  9. I was looking at hiring economist Jason Schenker to speak to a group of our clients. He’s been predicting since last year that there would be recession in early ’17 regardless of who was elected. This is based on historic trends related to election cycles plus key market predictors he’s been tracking. We didn’t hire him because we didn’t want our guests going out and committing suicide after lunch. Here’s a talk he did to a German group last year that I reviewed:

    https://www.youtube.com/watch?v=msyTdKWYwws

  10. I like to use this Churchill quote for moments such as this.
    “A fanatic is one who can’t change his mind and won’t change the subject.”

    Trump’s claim that the “real” unemployment rate is as high as 42 percent. That number is absurd — it would require counting everyone who isn’t working, including retirees, students and the disabled, as “unemployed.”

    When do you expect Trump will change the metrics for the unemployment rate so as reflect the “real” unemployment rate?

  11. it would require counting everyone who isn’t working, including retirees, students and the disabled, as “unemployed.”>

    As opposed to the Obama administration only counting the “unemployed” as those actively seeking work, and not counting those whom had given up trying to find gainful employment and were instead collecting welfare or disability?

  12. EI, the ugly fact is that over the past 8 years, job creation has been at levels which more or less matches population growth. What this means is that, statistically speaking, the people who lost their jobs in 2009 have by and large left the workforce, although most of them were not at an age when they ordinarily would have retired.

    Now we can quibble over how bad the reality is, but the simple fact is that 4.8% unemployment is a mirage that masks how bad the economy really is. If we will pay attention, we have the stats to prove it.

  13. I look forward to @therealDonaldTrump to change the metrics regarding the “real” unemployment rate. Being that Trump is a man of high integrity with impeccable business credentials, I would expect this to happen before the next report comes out. ;^)

    Philosophical question: do you think the Fed wants Trump to succeed?

  14. metrics regarding the “real” unemployment rate

    You mean the unreal unemployment metrics that discounted underemployed that 0bumbler was using? Trebling down on stupid, I see? Talking points getting in the way of alternate facts?

    And no, the Fed, currently staffed with 0bumbler cronies do not want sTrumpet to succeed. Hell, they do not want USA to succeed!

  15. NW: regarding Schenker
    NY Fed: Household Debt Increases Substantially, Approaching Previous Peak

    Aggregate household debt balances grew in the fourth quarter of 2016. As of December 31, 2016, total household indebtedness was $12.58 trillion, a $226 billion (1.8%) increase from the third quarter of 2016. Overall household debt is now 0.8% below its 2008Q3 peak of $12.68 trillion, and is 12.8% above the 2013Q2 trough.

    Mortgage balances, the largest component of household debt, which stood at $8.48 trillion as of December 31, saw a $130 billion uptick from the third quarter of 2016.
    Balances on home equity lines of credit (HELOC) were roughly flat, rising $1 billion to $473 billion.

    Non-housing debt balances rose in the fourth quarter; with increases of $22 billion in auto loans, 32 billion in credit cards, and 31 billion in student loans
    https://www.newyorkfed.org/microeconomics/hhdc.html

  16. JPA, maybe your time would be better spent by cleaning up those pavers in your fromt yard. ;^)

  17. Wouldn’t be that the PPI increases are impacted by myriad of issues such as environmental and other regulatory costs, government subsidies, impact of QE on dollar value, on and on.

    Yea, Trump in office all of 4 weeks makes him the one to blame for any increase in the PPI. What a load of baloney! The Fed has quite a record of failures, how many successes can be cited?

    I wonder what The Fed Sucks has to say on this.

  18. Does anyone know or understand Trump’s position with regard to interest rates?Continuity or raising the rate?

  19. I’d like to see Trump appoint more of an inflation hawk to replace Yellen, but given his history of using serious amounts of debt in his business, I’m not going to hold my breath on that one. On the flip side, Trump has disparaged the Fed’s loose money policies, and flipping yet again, I’m guessing his advisors (even if they’re Austrian in outlook) are telling him that tighter money could mean a recession.

    I can say this with 100% confidence: I’m not sure what he will do.

    I think it actually may have a LOT to do with the issue of unemployment; one of the best pieces of news I heard a week or two back, ironically, was that January unemployment was up despite “better than Obama” job growth of about 227k jobs. That would indicate that at least a portion of the long term “Obama uncounted unemployed” are coming out of the shadows to improve their position.

    It’s hard to count these people with standard methods, but I think that if we really want to get a handle on how the economy is really working out for most people, it’s something we need to get a handle on. My first suggestion; proportion of households headed by a non-senior citizen with earned income. Suggestion #2; number of households receiving SNAP or WIC. I’d bet a nickel that Obama does miserably with these criteria, and Trump so far is a slight improvement. We’ll see going forward.

  20. I belong to a small business association. At their monthly meeting last month, everyone was pretty excited about Trump’s plan to cut taxes and get rid of useless regulations. At least 10 of them indicated that they would be hiring more people to grow their businesses. I’ll see how many of them feel the same way at this month’s meeting next week.

  21. I’m going to push this again:
    https://paulromer.net/wp-content/uploads/2016/09/WP-Trouble.pdf
    Read it. This is the level that Yelen and other national bank managers operate at.
    One of the identifying features of late modernism is that given incomplete information and vague goals, the elites believe that they are mandated to act.
    The survival of our spedies depends on them acting! The world will be rendered lifeless if the do no act! But only after a Nazi resurgence!

  22. Much like BH429, I thought the priorities of the Trump administration would be tax cuts, infrastructure spending, and deregulation. And I thought that the negative economic policies on immigration and trade would be delayed until at least 2018. So far Trump has delayed the policies with potential short term economic benefits – and pushed the negative policies.

  23. Deregulation and tax cuts are what Paul Ryan wants. If Trump gives him that upfront, he loses his leverage. Ditto infrastructure spending. Infrastructure spending has bipartisan support, though it shouldn’t. Infrastructure should be payed for with local taxes, when possible.

  24. Good point regarding leverage.
    But Trump needs to revisit a truth of leadership: Everyone is not going to like or accept your leadership. Regrettably, Trump’s ego will blinds him to this truth and squashes opportunities for him to lead across party lines.

  25. Trump is always negotiating and taking bargaining positions. He doesn’t really state ‘facts.” Getting what he wants is more important to him than sticking to conventions (to say the least). By doing what he can to make the people that elected him invest in him, he is making a firewall.
    Trump won in NY real estate (even it he did it . . . unconventionally), Trump made it in show business, he won the GOP nomination, and he won the presidency.
    Trump probably knows very well what powers he has and does not have as president. He will learn to leverage those better as time passes.
    Trump should not be underestimated.

  26. Trump will not lose any of his supporters until something tangibly bad happens that can be directly seen and felt. Higher unemployment, low monthly jobs numbers, higher gas prices, inflation, questionable military action resulting in lives lost. Their blind infatuation and loyalty to him will only disappear with news that he cannot say is fake.

  27. eTASS, what was the point of your non-sequitur post at 2:03? Does copy and pasting numbers into a post make you feel smarter? It ain’t working.

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